Thursday, November 26, 2009

"You can't soar like an eagle when you are surrounded by turkeys" (Harry Markopolos, Senate Banking Hearing, Sept. 10, 2009) except on Thanksgiving! In India, we don't have thanksgiving, partly because we give thanks everyday. I remember going to the local temple everyday... and being surrounded by the blessings of thought, reflection, and community prayer. In Canada, thanksgiving takes place on U.S. Columbus Day and the turkeys do come out much like American thanksgiving; a harvest festival involving pilgrims and natives thanking nature for that year's bounty together, from what I understand.

I am still new to American culture, having become an immigrant only recently and many of the rituals appear foreign to me. The values around the idea of giving thanks however, is one that resonates deeply. The idea of assisting those who do not have, or thanking those who have made great sacrifices for our comfort comes naturally to most of us. Indians for instance hold great honor in welcoming anyone in need into their homes and feeding them any day of the year. This is particularly important because part of the culture requires Hindus to give up their status and belongings and seek enlightenment at some point in their lives.

The need and importance of a Thanksgiving day is underscored by its contrast to consumer culture in a land of plenty. Here few people starve and pray for daily bread as they do in some lands, even though there is enough food to feed all 7 billion of us. The lack of food that does develop has little to do with availability and more to do with hoarding behavior.

Attachment disorder is a significant aspect of hoarding behavior. We have seen so much hoarding behavior of late, from the extreme frauds of the Madoff type to the squandering of immense wealth at the expense of the common American by large institutions and government. It is interesting to note that those with OCD (obsessive compulsive disorder of the Madoff variety) are also prone to hoarding:

A psychology professor at Smith College estimates that 2% to 3% of the population has OCD, and up to a third of those exhibit hoarding behavior (Cohen, 2004). This appears consistent with 2% of the world's population holding 50% of its wealth.

The 3-part definition of clinical hoarding is as follows:

1.The acquisition of, and failure to discard, a large number of possessions that appear to be useless or of limited value (Frost and Gross, 1993).2.Living spaces are cluttered enough that they can't be used for the activities for which they were designed (Frost and Hartl, 1996). 3.Significant distress or impairment in functioning caused by the hoarding.

Hoarding has three components:

1.Acquiring possessions compulsively - compulsive buying, or collecting free things.2.Saving all these possessions and never discarding.3.Not organizing and maintaining all the saved possessions. (http://www.squalorsurvivors.com/squalor/hoarding.shtml)

I am surprised by the 2-3% figure as what I see around me appears to show a greater amount of hoarding behaviour. There is so much on TV and in the media that suggests the push toward acquisition, although most of it also pushes toward discarding what is acquired so that more can be acquired and then discarded. I suppose what is most suggested is temporary attachment to things acquired. In some ways this could be a profound message. Some of the oldest principles and values espoused by humanity stress the temporariness of all we experience and an acceptance of this temporariness. The study above appears to suggest that OCD type attachment to possession comes from an insecurity in the person stemming from a lack of attachment to the real. Hence objects and possessions and even money can act as a substitute for real attachment to people such as parents or other loved ones etc. One would think also that such hoarding behavior may also show up in extra-marital affairs, because of the inability to truly attach. All are antithetical to the messages of Thanksgiving.

Giving thanks and the experience of gratitude involves attachment. And attachment to other people, animals, even the earth in a profound way is a remarkable attribute of human experience. It is because of a deep attachment or love for what and who is important to us that we also can let them go. This letting go is different from the discarding of things that every advertisement beckons us to do. True attachment is important to meeting up with that expansive sense of attaching to the larger universe, in line with the Hindu aspiration of enlightenment. What are we talking about? It takes a little love in one's life. Without real love and the creation of such bonds, it is hard to give thanks.

It is no wonder that when we think about holidays like thanksgiving, we think about family and being with those we love. The sense we have of being showered with blessings enables us to give love to others who may not be as fortunate, or who may simply be situated differently (if we don't want to pass such self-absorbed judgment on the state of others in a different economic, health, ability, or opportunity bracket).

So if you are walking about on this holiday and not OCD (or if you are afflicted with this condition try to get over it for a few days of the year) go out and spare some change for those in need, maybe even give away a few things to someone who could really use them!

Monday, November 23, 2009

I can remember my grown children as babies. Cute, curious, full of energy, exploration, and playfulness. They have not changed a great deal, somehow managing to retain their essence in spite of what the world and their parents have thrown their way. I still want to protect them, and refine the value system they have cultivated through their upbringing and the cultural attributes I hold dear as they go off and explore their world further.

I realize that many parents around me do not adopt the same stance. Even their Dad tends to be less protective, letting them figure their own way earlier and having different expectations of their self-sufficiency.

This tension between self-sufficiency and protection often conflated with cultivation of culture or particular values is seen in the legal system and the making of laws also: from inception within the political and legislative process to adjudication and enforcement. This tension within the legal system just like within two sets of parents comes from a difference in cultural precepts and sometimes even personality types. Perhaps we can liken the latter to partisanship?

We play out, in and through the rules we create, much of the drama of the parent-child dynamic because governance itself invokes care taking and care giving between the larger whole or body politic, the structures it creates, individuals, communities, and the many governing structures whose role it is to provide such care.

I use the term 'care' as an ideal, of course. How many of us do not often feel neglected? We want our government to care and implement caring actions, but there are seldom enough resources. Our government like many parents is over stressed, out of time, out of money, or can't make ends meet -- all of which leaves little room or sentiment to provide the care required.

But one day, one of my children or one of your children may occupy a governing role within the larger care-giving institution, or government. The structures and institutions we have created are all peopled by individuals not so long ago children. And in that view, we can understand that these institutions we have created have within them a microcosm of all the pushes and pulls of conformity, power, service, play, sloth, perfection, mediocrity, and curiosity to which their members may be susceptible, just as they were in the school yard.

I realize that inadvertently or intentionally it appears I have made a judgment that the parents or teachers are missing in that school yard. I think sometimes that is true or it feels that way. But even when that is true we have the larger structures or institututions that make up the government to provide us with the sense of stability and security we expect from parents. Those institutions are founded upon certain basic rules we deploy to guide our sense of freedom and limits. Where rules and laws are made or changed, processes involving time, deliberation, participation of experts and interested parties, as well as institutional reflection will assist with the stabilization of governance and the invocation of change.

So in the wake of destruction to our security and confidence caused by the financial crisis, it is useful to ponder these dynamics also. While the financial crisis toppled markets and destroyed investor confidence in the very idea that we can be secure in our economic and financial system, we still depended on the weight, solidity, reflection, and participation of our legislative processes and governing structures.

We had confidence in the deliberative processes by which we usher in changes in rules, paradigms, and systems in this country. It is for this reason the quick passing of the bail out packages caught me by surprise. I cannot pass comment on the real necessity of those actions to the economic system on which we have come to rely. I don't count myself as one of the insiders to that story.

I do know there was another level of confidence those actions threatened - confidence in our governing institutions and processes. Even if we will eventually be glad our government took the steps to protect us and perpetuate the value system we choose to live by, our security was undermined anyway. It didn't feel like we, as individuals and communities, were being protected. Instead, it felt like institutions that were grown up enough to take care of themselves were coddled at our expense.

Thursday, November 19, 2009

It was not so long ago, although it seems like another life now. I was riding a Tanga (horse drawn carriage) in Srinagar as a young girl. I remember the bus from the city of Jammu to Srinagar in Kashmir... a perilous journey from which many did not return. Buses skidded down the slope of the mountainside to the Chenab River below. I could see them from the window seat in the bus, wondering if we would make it through to the city where my family waited for me, not knowing if and when I would arrive with my mother and brothers. Those images and experiences are etched in my heart.

Integral to those images is the notion of rapid change and immense possibility for transformation. I was a girl in a city on this planet who had ridden in a horse drawn carriage as the main mode of transportation and within a few years, reunited with my father in Montreal -- in a different world, with a car of our own, a Buick Lesabre as our main mode of transport. Add to this the dazzle of electric lights I first beheld on my journey to the west. From east to west the sun rises, and I too had risen to know these lights and this difference. A young heart carries the color of passion, of future hope and potential, of imagining never-ending possibility.

I have described a part of my core, so you literally have a sense of where I have come from. Often I hear from someone or other, that some change that we may hope or long for is not possible in our lifetime. And even to me it may seem impossible, yet there is always that flicker of doubt in my heart that colors that determination. "Nothing is impossible," it whispers. Time, after all, is itself a fiction we protect to support our own limitations.

What has this to do with the law? Everything. The structure, order, and rules by which we seek to govern ourselves, are often the slowest to change. However, even these frameworks for governance can change at a rapid rate in the right circumstances. They change with the advent of a social or human connectivity that did not previously exist. Sometimes such connectivity has taken the guise of religion, a faith, belief, or ideology that links people in different lands and across borders. Sometimes such connectivity arises out of the faciliation of mobility, such as the airplane, or train. Sometimes such connectivity arises out of communication devices. The printing press, telegraph, telephone, and internet come to mind. Obviously the confessions of a Ponzi-schemer can also unite many.

Scholars have stated that we imagine our communities into existence. The printing press for instance has been attributed with the development of the nation-state because of the connectivity it established within a certain territory through readable pages multiplied easily. Now the internet has revolutionized communication such that communities can develop around every topic of conversation, often called 'chat rooms.' The informal but widespread structures sprouting up all around us in networks of connectivity may inspire us to rethink fairly quickly the kinds of community frameworks that make the most sense. In turn, more ad hoc and informal rule-making appear likely.

However, one aspect of such rule making will prevail and that is transparency. There is a larger public domain than ever before just as our population itself is busting at the seams, having reached unprecedented numbers. We have kept pace and developed means to record all activity. Each of us can have his/her own public and public persona. In fact, privacy itself will become increasingly prized as it will be nearly impossible to find. We are proceeding at a fairly quick pace toward a world community and inevitably, world governance , as scary as the prospect may appear to some. Not surprisingly given my own trajectory, I imagined it as a 12 year old in Montreal, only a few years after making my way to the new world. Now I cannot believe how quickly we are racing toward it.

Saturday, November 14, 2009

Today, I feel like starting an experiment. I need to find out how many of the people I am dealing with are honest and intend to handle ethically the 'money' situations that come their way. (It is often unclear what the law requires in each situation, but ethics invoke at least an element of moral right that we can talk about together. This is a better gauge right now as I try to ascertain how much of my public engages in or at least attempts to engage in right action, even if it is individually, and variably defined, culturally). This applies to my clients, affiliate law firms, collaborative law firms, friends, colleagues etc. Let me be clear, I am not casting stones... he who throws the first, right? That would be fairly arrogant. I am just trying to learn.The experiment is this: I would like clients to think for a few moments what my services and time are worth to them and pay what they like. If ethical considerations were at work, I think no one would be trying to take advantage of me, and they would be paying as much as they could afford. What do you think?

In money, we have constructed a tool for communicating mutual and one-way obligation with one another. Such notions as reciprocity, self and generic worth and value are all mixed up with money. As long as a certain level of comfort can be guaranteed by our country's economic conditions, and our currency retains a certain value, we can intuitively ascertain and apply a monetary value to our sense of the worth of the effort we put into our work, our relationships, our homes etc.

Money may have nothing to do with effort. Some of us come into a boat load of money and do nothing to earn it. Others work their hands and other body parts off, but somehow don't see any of it. Supposedly money begets more money, sometimes money also is lost because not everyone is above board. There is a premium on acquiring as much money as possible while doing the least amount of work. Why is that? Theft is incentivized directly. You steal, you keep and you see what you keep, no commissions and little competition (at least one of my clients would say I am being naive).

However, what is not taken to heart is: where do the thieves think they are going? We all have 80 years or so to live. And none of us is taking it with us where we are headed. It won't be needed over that border. No matter what kind of insurance we have, there is no guarantee that all our money will not be lost. None. Something may happen and we may finally see that our money is worthless to satisfy our deepest desires and wishes, even without being visited by a large meteor or tsunami. You store away or work endlessly to accumulate wealth over the course of 20 years and come to see that your kids have grown up without you. As a result, when you are older, they are not there for you, just as you were not there for them. You are a millionaire a hundred times over at the age of 55. What a great situation right? But you are hit by a cancer that cannot be cured and oops, there is nothing you can do. Suddenly, there is no way to pursue the legitimate right to enjoyment for which you have worked so hard. And you don't know how your money can help. It can't, in most cases. Sometimes, money does buy hope and opportunity.

I have also seen that something strange can happen when people get a little more money than they "really" need. "Greed". Something also happens when people have too little money, and want to find a way to get enough, theft. Somehow the latter situation is easier to understand. Isn't it? There are ways then in which money due to our association of it with concepts of 'worth' and 'value' can be used to compensate ourselves and others for deficiences, real and made up. Instead of addressing questions of reciprocity, obligation, worth and value for what they may really be, we conflate them with money and lose sight of the real context of those issues and questions.

I am not trying to write a sermon here. I am just trying to understand how to get on in the world. I am a lawyer. I have started a new law firm, and this brings some growing pains and money is an issue, of course. But I am also a mom of two formidable individuals, who I helped grow (a social service to be sure), have grown a host of clients (many of who are my best fans, another social service) and a number of friends, even boyfriends and fiances (another social service!). Do I bring these experiences with me into the services I provide? I have an hourly rate of $600 which when compared to my plumber in times of emergency ($210) doesn't seem too steep. In an emergency, who would you pay more, your lawyer or your plumber? Maybe it is more of a toss up than we would care to admit. The analogy is painfully pertinent. We all can study the law. Lawyers are not Gods, as some pretend to be. The law applies to us and is a tool for the people. You should know the rules that govern you and your relationships. Similarly, those pipes are in our house -- we should know how to fix them when something goes wrong. How can we live in a place we don't have the tools to repair or change to do our bidding?

Here is where another element enters the picture, time. Time is money, we are told. It turns out that world wide studies show that folks who go to college and put in that 3 or 4 years to get a degree earn much more than those who don't. So the time you put into getting that higher education is worth it, so to speak! Once you get to graduate school, law, business, Masters, Ph.D., it would make sense that having spent the additional time may also mean greater income, or it may justify that extra few hundred on your hourly rate. How about if you have 5 graduate degrees? Do you maybe reach a plateau somewhere? Maybe that plateau exists at your own sense of fairness. Does the wisest and smartest person in the world charge an outlandish amount? She could. But what would that say about the wisdom and ethics she is espousing? You can see hopefully, where I am going. (Go back to where we are not taking it with us.)

This is an earthly dilemma, some tell me. It is based in the market. There is such a thing as market value that we hold as the standard to help us determine the worth of our qualifications and wisdom. It may have little to do with our own reality. It is a more 'objective' and 'independent' barometer of value. Yet, this value, as we have recently seen in the financial crisis, may be skewed, as it certainly is, by a systemic fiction (subprime, derivatives). How and why do we then apply it to all we do in life? All those social services I was referring to. What if I don't want to put a money value on them? Does it mean I get taken advantage of? And if you take advantage of me, is there a money value I can place on your newly created obligation to me? Do things like guilt and shame have a money value too. Sometimes these are more powerful and valuable tools than money.

There are two situations that have prompted these inquiries and the experiment I related above. One, I have embarked on this new terrain of contingency work in which I don't charge clients up front and I get paid when a recovery comes in. Sometimes, I charge up front fees to cover some expenses, but ask for a portion of the recovery as well. The theory behind this work is that you are logging your hours and upon recovery you show the work, time etc. you have put in and the contingency covers (if you are lucky) all the time and expense put in on behalf of clients and even a certain portion of equity. Most clients like this situation as they should. They don't have to pay while you take a risk that you will succeed in providing them with relief and at that point, you, as their partner, have earned, maybe more than earned, your keep. Contingency fees can run up to 40% of recovery as a result. So you are a real partner with your client. You just need to make sure you have enough financing to keep yourself and your staff paid while you work for umpteen years at a time. This is the market... it takes no account of your special circumstances. Some lawyers have gone bankrupt in this process, never able to recover. One would think that clients would be well served to make sure basic expenses are covered if they are real partners and believe that this lawyer has knowledge that serves their interest, but where there is competition, clients don't have to do so. They may not take the time to understand the specific wisdom, or special experience/expertise of the lawyer in question.

Two, even in non-contingency work, clients and others who don't pay when they are obligated to do so is a recurring nightmare of those in any business. I am already seeing the repercussions of it. Yes, collections agents have approached me. These folks keep saying for months that they will pay, but don't. They don't provide any conditions to be fulfilled in order to allow the payment to come forthwith, they just don't respond and don't pay. When does one stop providing service? What if it is an intermediary counsel who owes you your part of the retainer fees? He is your partner in the case but clearly holding onto your money in his own firm's bank account. Clients are clients, but lawyers can be susceptible to greed too. There are ethical rules governing lawyers' conduct with client funds in some countries, but not all. As the communication and common work increases across borders, more concert in such rules must be in the offing. But the implementation and enforcement of such rules, is the real difficulty.

We all have a moral compass, and we know right action. It is acting on our moral compass that is of real value for clients and lawyers alike.

Monday, November 9, 2009

There are so many cases yet to come against deep pocketed defendants in the Madoff and other frauds. These are not easy cases. And I am stunned, as I review the case law, by the imbalance in favor of powerful institutions who have the resources, not only to protect their interests with legislators and in the courtroom, but also in their initial due diligence when soliciting client funds. We as consumers and investors in these institutions, have come to expect such diligence on our behalf because of their size, breadth, and resources, and by their easy access to cross-border funds. No less when these institutions have betrayed their capacity and ability to sustain such costs with both personnel and finance in brand names, we as consumers have come to respect and affiliate with the level of expertise they flaunt through millions of dollars of marketing. Where are the ethical standards that would inform the sweeping actions of such institutions when they gather funds, if they will justify their actions at the expense of the very clients who have supported their aggrandisement through the years?

There has clearly been a discrepancy between the message marketing has produced and reality, otherwise we would not be at the low point in investor confidence around the world that we see today. The global financial crisis, and serial fraud have brought home a message of shame within the financial services industry. The stain of this shame will be hard to remove. Here liability is the issue. Without the sense that such powerful institutions are subject to independent judicial review, how do we tout the rule of law throughout the world as a plausible and necessary ideal?Right action, and independent review must start at home and the U.S. must set an example of reform that will ripple the principles this nation holds dear throughout the world.

In the hope that the investing consumer can still find justice in the courtroom, my small law firm has started on the path of holding financial institutions liable. At the same time we are busy with the prospect of serving those we believe deserving of our service, time, and at the risk of exposing sentiment... our devotion. We do devote ourselves everyday to the pursuit of what is most right, to support others who are on this quest for those injured by fraud, by flagrant abuse of power, and by the systemic failings to which all of us are vulnerable as actors and recipients. Change cannot be effected by wishing it, it requires the effort of our hearts and our hands! In our case, both are full!

We, like our clients, are hopeful that in the end, those same financial institutions will thank us for increasing investor confidence, and one day with the change in this tide, providing them with more clients based on the raising of the ethical and legal standards in the services they provide to consumers.

Thursday, November 5, 2009

Not so long ago, I was consulted by a colleague at another firm, as to what I thought of their claims against the SEC in the Madoff case. I stated that it is difficult not in some way to hold the SEC responsible for the mess and tragedy that has resulted in the Madoff case but that I would wait to see what the SEC IG's Report held in terms of evidence. I think now that I have reviewed the complaint of my esteemed colleague that I was misunderstood.

Can the SEC be held accountable? Maybe. The current complaint is one that has a very steep uphill to climb. Perhaps there are arguments held in sleeve to surprise the formidable adversary. I will certainly be waiting to see what these may be. But as far as I can make it out, the issues of discretion and negligence pervade the case-law, most of which appears well-settled. The most difficult aspect is the tying up of lack of discretion and judgment to the kinds of duties exercised and the ways in which these duties are exercised in the performance of functions at the SEC. The problem is that the very discretion of staffers is what opens them to assaults of negligence and incompetence. The legal web of sovereign immunity is fairly tight on these issues. I am sure those more knowledgeable than myself would find many other situations in which the SEC has been negligent if not downright captive, including one of my clients. It is at best unclear that the SEC/US Government would be held liable in all these instances.

This being said, the question of holding one's government 'accountable' and 'liable' may be two different things. It is one that requires careful thinking about the policy behind statutes created to except the SEC like other government agencies from liability that other ordinary citizens and entities are open to sustaining.

As many of you know, I propose to hold the SEC (certainly past incarnations and administrations of the SEC) 'accountable' for the immense tragedy, domestic and cross-border caused in the wake of the Madoff fraud. The reason I make this distinction is that liability will take a decade to parse out, and the investors and customers of Madoff from as far away as Japan, many of whom did not even know that their money was being funneled to this one mastermind, are older citizens of the world who were trying to put their hard earned money into a safe investment and now find it lost. From my many discussions with investors close and far, it is clear, not one of them wants to wait to get their money back. Could a lawsuit against the SEC, especially one with some real teeth win? Maybe, but who wants to wait? All I hear is that investors and customers alike want to hold the government accountable... it is the meaning of accountability and expedited investor recovery that really interests me and I believe, most investors!

Why is that? It is because of a belief I hold dear. The law is a vehicle to assist and serve those in society come to a quick resolution of their claims. It is not for some of us who have had the privilege and opportunity to go to law school to stroke our egos or perfect our philosophies at the expense of our elders who have been traumatized and shocked by the betrayal of the financial system generally and by the immense impact of this specific fraud. In a situation such as this, where a government agency could have facilitated an earlier discovery and potentially prevented the tragedy (not unlike Katrina) some 16 years ago, the agency must be held accountable and do the right thing! And I for one, will give it every opportunity to do so.